Invest In AIF with Regnum Wealth

Alternative Investment Funds are defined as privately pooled investment funds. They are categorized by SEBI as Category I AIF, Category II AIF, and Category III AIF. Assets under management can include start-ups, SME funds, infrastructure funds, private equity funds, or even hedge funds that may be trading in listed or unlisted derivatives depending on the type of fund.

Features and Benefits of Alternative Investment Funds

As the name suggests Alternative Investment Funds in India are non-traditional investments. This means the assets under such funds are not correlated to the stock market. These funds are primarily for high-net-worth investors looking for diversification and better potential returns while absorbing the accompanying risk. Some of the benefits and features of Alternative Investment Funds are:
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Diversification is one of the key features of these funds. They have considerable freedom to decide where to invest unlike most funds which are regulated by SEBI.

Non-traditional investment options are available to these funds which are not generally open to all investors.

Potential returns are a factor considering the type of non-traditional assets these funds invest in.

The minimum investment amount is INR 1 Crore depending on the type of AIF.

Types of Alternative Investment Funds

Alternative Investment Funds in India are categorized into 3 types per SEBI rules

Category I are funds with strategies to invest in start-up or early stage ventures or social ventures or SMEs or infrastructure or other sectors or areas which the government or regulators consider as socially or economically desirable.These invest in Startups, SME’s, Social ventures, Infrastructure funds, Angel funds, or Venture Capital Funds

Venture Capital Fund

SME Funds

Social Venture Funds

Infrastructure Funds

Category II are funds which cannot be categorized as Category I AIFs or Category III AIFs. These funds do not undertake leverage or borrowing other than to meet day-to-day operational requirements and as permitted in the Regulations. Private Equity debt funds that invest in real estate funds, funds for distressed assets, funds of funds, etc.

Real Estate Funds

Private Equity Funds

Funds for Distressed Assets

Category III are type of fund that invests in Hedge funds or funds which trade with the purpose of making short-term returns and can employ complex and diverse trading strategies, like using arbitrage, derivatives trading, and open-ended funds.

Hedge Funds

Private Investments in Public Equity

Aspects of Alternative Investment Funds

Frequently Asked Questions (FAQs):

 

1. How Does an Alternative Investment Fund (AIF) Work?

Alternative Investment Funds are a privately pooled investment vehicles that collect funds from sophisticated investors, whether Indian or foreign, investing in non-traditional asset classes such as angel funds, private equity, hedge funds, venture capital, managed futures, etc.

2. How do I Start Investing in an Alternative Investment Fund?

Approaching your financial distributor is the best way to start investing in an Alternative Investment Fund.

3. Who can Invest in an Alternative Investment Fund?

Indian residents, non-residents (NRI’s), and foreign nationals can invest in Alternative Investment Funds.

4. What is the Enrollment Charge to be Paid for an Alternative Investment Fund?

The enrollment charge to be paid for an Alternative fund depends on its type. All three categories have an application fee of Rs. 1 lakh. Registration fees are Rs. 5 lakh, Rs. 10 lakhs, and Rs.15 lakh for Category I, II, III respectively.

5. What is the Upper Limit for Investors Under Alternative Investment Fund (AIF)?

There is no upper limit for investors under Alternative Investment Funds. Minimum limits are Rs. 1 Cr depending on the type of the fund. Also, no fund must have more than 1,000 investors.

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